Garden State Solar Sector Continues to Heat Up, Though Clouds on Horizon

New Jersey deployed nearly 400 megawatts of solar capacity in 2016, fifth-highest ranking in United States

New Jersey’s solar sector continues to grow despite some warnings of dark clouds on the horizon.

The state installed 383 megawatts of solar capacity in 2016, good enough to earn the fifth-best ranking in the nation, according to the Solar Energy Industries Association and GTM Research.

In the first quarter of this year, New Jersey added 89 megawatts (ranking sixth fastest-growing in the nation), according to the survey. The Garden State is among five states to have topped 2 gigawatts of solar capacity.

What’s more, the U.S. Solar Market Insight Report estimated the state is on pace to maintain and even exceed its current growth rate, adding a projected 2,350 megawatts of capacity over the next five years.

That far exceeds how the state projects the solar sector will install capacity over the short-term. Unless the state changes mandates on how many solar systems should be installed, there are some clean-energy advocates who fear the market could crash.

“If New Jersey had a more stable solar market, we could achieve those growth projects,’’ said Doug O’Malley, director of Environment New Jersey. “Instead we’re going to see a crash unless there is a short-term fix to ensure we don’t go over a solar cliff.’’

That collapse in the market, drying up investment in the sector and shedding thousands of jobs, happened five years ago. To avoid that, some argue a legislative fix is needed to address a leveling off of mandates for new solar systems, which would occur starting next year.

Lyle Rawlings, the founder and president of Advanced Solar Products in Flemington believes that fix is coming soon. Rawlings noted the price of solar credits — what owners of the arrays earn for the electricity they produce — has been holding steady for some time.

“It’s indicating the fact that the market believes there will be a legislative fix, if not with the current governor, then the next governor. “I don’t think New Jersey will ditch this industry.’’

The report offers a lot of reasons to keep it thriving. The survey found 328,000 homes powered by solar; 6,056 jobs (ninth in the country); 560 companies with a total investment of nearly $8 billion (including $823 million last year). The price of solar has declined 64 percent over the past five years.

“The solar future is bright for New Jersey,’’ said Sean Gallagher, state affairs director for the Solar Energy Industry Association. Last year, the state Board of Public Utilities told the organization it received more application for residential solar systems than ever before.

Rawlings is not surprised. The entry of so-called third-party suppliers, who own the solar systems through either lease arrangements or power purchase agreements, have proven very popular with customers. Such arrangements spare the homeowner of having to ante up the money for the system.

“The solar market clearly remains on a strong upward trajectory,’’ said Abigail Ross Hopper, the SEIA’s president and CEO. “Solar is delivering more clean energy, adding jobs 17 times faster than the U.S. economy and creating tens of billions of dollars in investment.’’

However, downside risk looms over the long-term outlook for the United States due to a trade dispute initiated by Suniva, a U.S. solar manufacturer that filed a petition with the International Trade Commission. If successful, the manufacturer’s case could lead to import tariffs that raise system costs by between 13 percent and 35 percent, according to the SEIA.